Shared Services Agreement
AGREEMENT made this 22nd day of January, 2008 between Commonwealth Annuity
and Life Insurance Company, a Massachusetts corporation ("Commonwealth
Annuity") and Epoch Securities, Inc., a Massachusetts corporation ("Epoch").
WHEREAS, Commonwealth Annuity and Epoch have entered into an Underwriting
and Administrative Services Agreement dated January 22, 2008, as may be
amended from time-to-time, pursuant to which Epoch serve as principal
underwriter for certain variable annuity contracts or variable insurance
policies (the "Variable Contracts"), which are issued by the Company and its
separate accounts;
WHEREAS, Epoch, an affiliate of Commonwealth Annuity, is registered as a
broker-dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member of the
Financial Industry Regulatory Agency ("FINRA");
WHEREAS, pursuant to the terms of the Underwriting and Administrative
Agreement, Epoch has assumed full responsibility for the securities
activities of all "persons associated" (as that term is defined in Section
3(a)(18) of the 0000 Xxx) with Epoch and engaged directly or indirectly in
the variable contract operations (the "associated persons"), and is
responsible for the continued compliance by itself and its associated
persons with the FINRA Rules of Practice and Federal and state securities
laws, to the extent applicable in connection with the distribution of the
Variable Contracts and the Variable Contract operations;
WHEREAS, pursuant to the terms of the Underwriting and Administrative
Agreement, Commonwealth Annuity has agreed to perform certain administrative
services on behalf of Epoch and to provide certain facilities to Epoch;
WHEREAS, Epoch and Commonwealth Annuity may from time-to-time perform other
services on behalf of the other, including but not limited to providing
management services, administrative support, the use of facilities, offices,
and employees, and such other services as the parties may agree to from time
to time (the "Additional Services");
NOW, THEREFORE, in consideration of the covenants and mutual promises of the
parties made to each other, it is hereby covenanted and agreed as follows:
1. Commonwealth Annuity will bear the cost of all services and expenses,
including legal services and expenses, filing fees, and other fees incurred
in connection with distribution and administration of the Variable Contracts,
including but not limited to:
(a) registering the Accounts and contracts and qualifying the contracts for
sale in the various states;
(b) preparing, printing, and distributing all registration statements and
prospectuses (including amendments), contracts, notices, periodic reports,
and proxy solicitation material;
(c) preparing, printing and distributing advertising and sales literature
used by Epoch or furnished by Epoch to broker-dealers in connection with
offering the variable contracts; and
(d) all costs associated with the variable contract compliance function
including, but not limited to, fees and expenses associated with qualifying
and licensing associated persons with Federal and state regulatory
authorities and the FINRA and with performing compliance-related
administrative services, and
(e) sales commissions and other compensation, if any, due to broker-dealers
for the sale of Contracts or to other persons fro activities relating to
the sale of the contracts.
2. Commonwealth Annuity shall, as agent for Epoch, and at Commonwealth
Annuities expense:
(a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under the
1934 Act all books and records required to be maintained by Epoch in
connection with the offer and sale of the Variable Contracts, which books
and records shall remain the property of Epoch, and shall at all times be
subject to inspection by the SEC in accordance with Section 17(a) of the
1934 Act and by all other regulatory bodies having jurisdiction over the
Variable Contracts:
(b) send a written confirmation for each contract transaction reflecting the
facts of the transaction and showing that it is being sent by the Company
on behalf of Epoch (acting in the capacity of principal underwriter for the
Accounts), in conformance with the requirements of Rule 10b-10 of the 1934
Act; and
(c) transmit all sales commissions and other compensation to broker-dealers
having a sales agreement with Epoch.
3. Commonwealth Annuity shall reimburse Epoch fully and completely for all
expenses incurred by Epoch for distribution services, administration
services, and Additional Services in connection with the Variable Contracts;
provided, however, if Epoch receives compensation from any third party in
connection with such services, and such services have been or will be
directly or indirectly provided by Commonwealth Annuity, Epoch shall pay such
compensation to Commonwealth Annuity.
4. To the extent that Commonwealth Annuity or Epoch provide Additional
Services to the other party that are not in connection with the distribution
or administration of the Variable Contracts, the actual costs and expenses
for such Additional Services shall be allocated between the parties as may be
mutually agreed upon by the parties.
5. Each party hereto shall each comply with all applicable provisions of the
Investment Company Act of 1940, Securities Act of 1933 and of all Federal and
state securities and insurance laws, rules and regulations governing the
issuance, sale, and administration of the Contracts. Each party hereto
agrees to furnish any other state insurance commissioner or regulatory
authority with jurisdiction over the contracts with any information or
reports in connection with services provided under this Agreement which may
be requested in order to ascertain whether operations of Commonwealth Annuity
or Epoch are being conducted in a manner consistent with applicable statutes,
rules and regulations.
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6. The parties acknowledge that their respective rights and obligations
constitute full consideration for this Agreement and agree that, except as
expressly provided herein, no fees or other charges are payable to the other
for the provision of services under this agreement.
7. This Agreement shall upon execution become effective as of the date first
written above, and
(a) unless otherwise terminated, this Agreement shall continue in effect
from year-to-year;
(b) this Agreement may be terminated by either party at any time upon giving
60 days' written notice to the other party; and
(c) this Agreement may be terminated at any time by mutual consent of
Commonwealth Annuity and Epoch.
8. This Agreement shall be governed by and construed in accordance with the
laws of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
COMMONWEALTH ANNUITY AND LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: President
EPOCH SECURITIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: VP, Chief Compliance Officer
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